Printer Friendly


 SAN JOSE, Calif., Oct. 5 /PRNewswire/ -- Citation Insurance Group (NASDAQ: CITN) and Madison Capital Inc. announced today that their merger became effective upon completion of the closing on Oct. 4. Shareholders approved the merger of Madison into Citation at shareholder meetings held Tuesday, Sept. 28.
 At Citation's shareholder meeting, Donald D. Young, Citation's president and chief executive officer, said, "This is the final step. The merger was recently approved by the California Department of Insurance and has received all the other regulatory approvals necessary. We will begin immediately to implement the plans we have made over the last few months to consolidate our operations. The first major change will be the merging of our Tustin branch office staff into Madison's Costa Mesa office during the month of November. Costa Mesa will become the new branch office for the Los Angeles basin and vicinity. For several years now, our strategy has been to build a regional multi-line insurer operating in tightly-focused areas of market specialization. By acquiring the Madison organization, we have significantly accelerated this process, expanding the commercial property and casualty business segment to more than 35 percent of premiums and gaining admission to the state of Washington."
 Madison's two insurance company subsidiaries, The Canadian Insurance Co. of California and California Consumers Insurance Co., are known as the California Consumers Insurance Group (CCIG). In addition, Madison owns Madison Acceptance Corp., a regulated premium finance company. CCIG writes only commercial property and casualty insurance and generated net premiums earned of $21.5 million in 1992. This compares with net premiums earned for Citation of $72 million, 85 percent in workers' compensation.
 Under the terms of the agreement, Madison common stockholders will receive approximately .068 shares of Citation common stock and 11.5 cents for each share of Class A or B Stock they hold. Madison currently has 31,651,500 shares outstanding. Therefore, under the agreement Citation will pay approximately $3,650,000 and issue 2,158,601 shares to Madison shareholders. Based on the closing price of Citation's common stock on Oct. 1, 1993 of $10.25 per share, the total value of the merger will be approximately $25.8 million. For financial reporting purposes the merger will be recorded using the purchase method.
 Paul Bancroft, Madison's president and chief executive officer, has joined the Citation management team as executive vice president and chief operating officer of Citation Insurance Group. Three Madison directors join Citation's board: James R. Bancroft, Paul M. Bancroft and Leslie W. Brown.
 Citation Insurance Group shareholders also approved a proposal to amend the Articles of Incorporation to change its classified board from a two-class structure, with each class serving for two years, to a three- class structure, with each class serving for three years.
 Headquartered in San Jose, Citation Insurance Group is a regional multiple-line specialist operating in tightly-focused segments of the workers' compensation and commercial property and casualty marketplace, through its three insurer subsidiaries, Citation's common shares are traded on the NASDAQ National Market System, symbol: CITN. Citation Insurance Company is rated B++ (Very Good) and both of the CCIG companies are rated B+ (Very Good) by the A.M. Best Company. As of the merger, the company has approximately 250 employees at offices in San Jose, Costa Mesa, Tustin, Sacramento, San Diego and Fresno, Calif.; Phoenix and Denver.
 -0- 10/5/93
 /CONTACT: Doug Gould of Citation Insurance Group, 408-292-0222; or Lise Needham or Stephanie Meyer, 415-986-1591, both of FRB for Citation Insurance Group/

CO: Citation Insurance Group ST: California IN: INS SU: TNM

PK -- SF002 -- 8717 10/05/93 09:02 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 5, 1993

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters